Virtually opening the doors for global giants like WalMart and Carrefour, the Committee of Secretaries (CoS) today recommended up to 51% foreign direct investment (FDI) in the politically sensitive multi-brand retail.
A foreign retailer, however, will have to commit at least $100 million investment, and 50% of FDI component have to be deployed in the back-end infrastructure, like warehousing and cold storage, sources said.
Welcoming the recommendations, Future Group CEO Kishore Biyani told PTI that "...I think, step-by-step, we are moving closer to opening the multi-brand retail in India to FDI. This will invite a lot of interest from retailers the world over."
He said the company might look at having strategic tie-ups with global retailers in home, electronics and sports goods.
"The CoS, which met under Cabinet Secretary Ajit Kumar Seth, took the decision in this regard and the matter would now be placed before the Cabinet," sources added.
The CoS also recommended that FDI should be allowed only 36 large cities which have population of over 1 million.
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There was, however, no official confirmation on recommendations of the CoS.
Many global retailers like Wal-Mart are waiting in the wings for a full-scale entry into India's multi-brand retail segment, dominated by mom & pop stores. An Icrier report had pegged the size of the sector at about $590 billion.
India has already allowed FDI of up to 51% in the single brand retail and 100% in cash and carry format of the business.